Filed 10/30/18 Berwick v. Walsh CA4/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
| MARK BERWICK,
Plaintiff and Appellant,
v.
CHERYL L. WALSH, as Guardian ad litem, etc. et al.,
Defendants and Respondents.
|
G054632
(Super. Ct. Nos. 30-2015-00773248
O P I N I O N |
Appeal from an order of the Superior Court of Orange County, Jamoa A. Moberly and Gerald G. Johnston, Judges. Affirmed.
Law office of Alan S. Yockelson, Alan S. Yockelson; the Kiken Group and Dale A. Kiken for Appellant.
Law Offices of Cheryl L. Walsh and Cheryl L. Walsh for Respondent Cheryl L. Walsh.
No appearance for Respondents John H. Borja and Gilda Fracchia.
* * *
Mark Berwick, the temporary successor trustee of a trust established for his mother, Sharon Luke-Borja, and as the conservator of her person and estate, appeals from the probate court’s award of guardian ad litem (GAL) fees from that trust to Cheryl L. Walsh as the GAL for Sharon’s husband, Salvador Borja, Jr. Walsh’s GAL fees totaled just over $12,000. Berwick does not contest the amount of the fee award, but he contends the court lacked authority to order disbursement of the fees from Sharon’s trust. We disagree. Probate Code section 1003 expressly provides that the GAL’s expenses, “including compensation and attorney’s fees, shall be . . . paid as the court orders, either out of the property of the estate involved or by the petitioner or from such other source as the court orders.” The probate court therefore did not abuse its discretion in ordering payment of Walsh’s fees from Sharon’s trust, and we affirm the judgment.[1]
FACTUAL AND PROCEDURAL BACKGROUND
Sharon and Salvador married in November 1995; Sharon was in her mid‑fifties at the time. According to Berwick, Sharon and Salvador entered into the marriage, her fourth, with separate assets they intended to keep separate to pass on to their respective children. Accordingly, well before her diagnosis with Alzheimer’s disease in 2006, Sharon “created a sophisticated estate plan to protect her Person and Estate . . . [,] dictat[ing] that her separate property is to be used for the benefit of her issue explicitly and not for the benefit of her husband . . . .” In 2012, Berwick petitioned the probate court to be named conservator of Sharon’s person and estate, and the court granted the petition.
Sadly, Salvador’s condition also soon declined. In June 2015, his doctor documented Salvador’s impaired cognitive function at age 88, including “significantly deficient memory, concentration and [perception of] spatial relationships.” He also suffered from “very severe hearing loss,” further impairing his ability to “participate in his own legal representation.” A neurological assessment two months later in August 2015 yielded a diagnosis of severe dementia.
Earlier in 2015, in February, Berwick, already had filed one of the petitions that commenced this action, namely a petition as Sharon’s conservator to “Recover Assets with Double Damages.” The petition alleged that Salvador breached his agreement with Sharon to keep their property separate. It further alleged that in 2008, after Sharon’s impairment, Salvador caused her to execute a general power of attorney replacing Berwick and giving Salvador access to her assets. Berwick also alleged that in 2010 Salvador prevailed on Sharon to make other changes in Salvador’s interest to her “long standing prior . . . Estate Planning” stating that over the years Salvador had “caused Sharon’s separate property to be used to support his living expenses even though [he] has his own significant liquid separate property assets,” including “his own trust” valued at over $500,000.
Sharon was a school teacher before she retired and married Salvador. The parties provide no estimate of the value of her trust, which she established with funds she received as the beneficiary of separate trusts formed by her parents. But as reflected in Berwick’s pleadings, Sharon’s assets included a “rare diamond and family heirloom” valued at over $200,000, the Newport Beach home she shared with Salvador before she went into assisted living, and over $250,000 in financial accounts and other assets. In addition to seeking recovery of allegedly misappropriated funds, Berwick’s petition sought damages against Salvador for “Breaches of Fiduciary Duty as Agent,” along with an accounting, costs, and attorney fees. The parties refer to this petition as the conservatorship petition.
In February 2015, Berwick also filed in the same probate court action a related petition to remove Salvador as a trustee of Sharon’s trust, seeking “(1) Suspension of Trustee’s Powers; (2) Removal of Trustee; (3) Appointment of Successor Trustee; (4) Order Compelling Trustee to Report and Account; (5) Damages for Breaches of Trust; and (6) Costs and Attorneys fees.” The parties refer to this petition as the trust petition. After a series of hearings, the probate court in August 2015 entered an order “temporarily suspend[ing]” Salvador’s “powers of trustee” over Sharon’s trust and, in his place, appointed Berwick as “temporary successor trustee.” Sharon died on September 11, 2015. After her death, the court ordered Berwick to “continue to serve as Temporary Trustee” of Sharon’s trust, and it appears he remained in that position through the remainder of the proceedings pertinent here.
This appeal does not involve the merits of Berwick’s claims against Salvador in either of the petitions Berwick filed; those underlying claims apparently are still being litigated under a new first amended complaint. In this appeal, Berwick challenges only the probate court’s final fee order for Walsh, an attorney who served as Salvador’s GAL for about nine months near the outset of the proceedings, between September 2015 and June 2016. The probate court appointed Walsh when Berwick opposed a request by Salvador’s son, John, to serve as his father’s guardian ad litem, as Salvador, John, and John’s only sibling, Gilda, had agreed. Acceding to Berwick’s opposition, the court at a hearing on the conservatorship petition in September 2015, appointed Walsh to serve as Salvador’s GAL on that petition.[2]
John and his attorney attempted to persuade Berwick multiple times to agree to Walsh’s appointment as Salvador’s GAL on the trust petition, since Walsh was already serving in that capacity on the conservatorship petition. But, after failing to respond to those repeated letters and calls, Berwick required the matter to be set for a hearing. Berwick offers no explanation on appeal why he opposed John’s appointment on either petition, or Walsh’s appointment on the second petition, and points to nothing in the record to support his opposition. It appears Berwick did consent to John’s appointment as Salvador’s temporary GAL to file an answer to the trust petition, for which John had to retain an attorney. But Berwick would not consent to John or Walsh being appointed as Salvador’s permanent GAL on the trust petition, despite the court’s identical appointment on the conservatorship petition. Faced with Berwick’s ongoing opposition at the time of an October 2015 hearing, the probate court ultimately appointed Walsh as Salvador’s permanent GAL on the trust petition.
Following her appointment, Walsh reviewed the pleadings in the matter, communicated frequently on legal issues with Berwick’s attorney and the attorney John and Gilda retained, and made numerous court appearances. In April 2016, Walsh met with Salvador at his home, where she observed his condition firsthand. After the meeting, Walsh called John and Gilda’s attorney to recommend that the siblings “agree to act as Sal’s GALs due to their access to information necessary to prepare his defense.” As Walsh explained in an e-mail to John and Gilda’s attorney, “I visited with Mr. Borja on Friday. . . . He is not really able to participate in the litigation in a meaningful way and the only way I will be able to respond to any discovery or other pleadings is to get the information from your client[s]. Therefore, I think it would be better for your client[s] to serve as GAL[s] . . . .”
When John and Gilda agreed to do so, Walsh prepared a stipulation and proposed order appointing them and discharging Walsh as Salvador’s GAL. Berwick offered no opposition, and the trial court entered the order on June 1, 2016.
Walsh then prepared her GAL fee request. Her request initially included around $9,800 as the “reasonable value of legal services rendered,” which Walsh documented with billing logs showing 15.1 hour of her time at $400 an hour and 12.5 hours’ work by her associate at $300 an hour. Filing fees and other costs pushed the total slightly over $10,000. Berwick opposed Walsh’s fee request. In expending additional time and incurring further costs in response thereto, Walsh filed a supplemental fee request for just over $2,000 in attorney fees and costs, bringing her total GAL fees to $12,489.98. Walsh suggested that the probate court award the sum “out of Sal[vador]’s estate or Trust, or Sharon’s estate or Trust, as the Court deems appropriate.”
John and Gilda, as Salvador’s new GALs, supported the fee request with a caveat. They argued their father should not bear the fee expense. Rather, Berwick in acting as Sharon’s conservator and the trustee of her trust had driven up the cost of the proceedings; therefore Sharon’s trust should be responsible for the GAL fees. They noted Berwick refused to stipulate to Walsh as Salvador’s GAL for the trust proceedings when she was already serving in that capacity for the conservatorship. Additionally, they argued that because of “Berwick’s repeated objections to” John’s appointment as Salvador’s GAL, “Salvador has expended to date, fees and costs in excess of the fees Ms. Walsh is presently requesting, to end up with the same result Salvador was initially seeking.” As their attorney explained, “While John and Gilda do not object to Ms. Walsh’s fees, they do object to their father being forced to pay essentially what amounts to twice the costs to obtain a court order to allow his children to act on his behalf . . . .”
Phrased differently, the attorney noted, “But for Mr. Berwick’s ongoing refusal to consent to the appointment of John as Guardian Ad Litem for Salvador, Ms. Walsh would not have needed to be appointed, let alone incur fees which[,] while earned, unfortunately did not serve to provide benefit to Salvador in light of Ms. Walsh’s subsequent request to be discharged upon meeting Salvador due to his very apparent inability to meaningfully participate in the present litigation. As such, John and Gilda while supporting Ms. Walsh’s request for fees, [argue] the fees are properly paid out of the Sharon Luke-Borja Trust . . . .” The probate court agreed, entered a minute order to that effect, and then a final fee order. Berwick, on his mother’s behalf, now appeals.
DISCUSSION
Berwick challenges the probate court’s fee order on the ground that the court lacked “authority to pay Walsh’s fees incurred as [GAL] for Sal[vador] out of Sharon Luke’s . . . trust.” Berwick relies on Family Code section 913, subdivision (b)(1), which provides that, except as otherwise allowed by statute, a married person’s separate property is not subject to the obligations or debts incurred by the other spouse. Berwick recognizes that Family Code section 914 specifies that when a spouse incurs a debt for “necessaries of life,” the other spouse’s separate property may be a valid source to pay the debt, but Berwick argues GAL representation is not one of the “common necessaries of life” under the statute. (Fam. Code, § 914, subd. (b).) Berwick also observes that attorney fees are generally prohibited unless specifically authorized by statute or contract (Code Civ. Proc., § 1021), and he argues there has been no determination of the underlying merits to support an award of fees in Salvador’s favor as the prevailing party (ibid., § 1032).
Berwick’s reliance on the foregoing provisions is misplaced since the Probate Code (all further statutory references are to this code) expressly provides for GAL fees, including attorney fees, to be paid from “the estate involved” or other sources as determined by the court. Section 1003, subdivision (c), states unequivocally that “[t]he reasonable expenses of the guardian ad litem, including compensation and attorney’s fees, shall be determined by the court and paid as the court orders, either out of the property of the estate involved or by the petitioner or from such other source as the court orders.”
Based on this language, we find no merit in Berwick’s claim the probate court lacked authority to award Walsh her fees from Sharon’s assets, including her estate generally or her trust specifically. (See Araiza v. Younkin (2010) 188 Cal.App.4th 1120, 1124 [review of statutory language is de novo].) Berwick’s conservatorship and trust petitions identified those assets as the underlying “estate involved” (§ 1003, subd. (c)) for the probate court to adjudicate Berwick’s claims. More generally, the statutory language grants the court wide discretion to order the payment of GAL fees from “such other source as the court orders.” (Ibid.) Nothing in this broad grant of authority precluded the court from considering Sharon’s assets as a source to pay GAL fees. Similarly, because section 1003 specifically provides that those fees shall be paid “as the court orders,” we find nothing in the Probate Code—and Berwick cites no authority—suggesting a GAL must await a prevailing party determination to be compensated. (Cf. Kasperbauer v. Fairfield (2009) 171 Cal.App.4th 229, 236 [attorneys who aid in trust administration are properly paid before final adjudication].) Delaying payment of Walsh’s fees would be particularly inappropriate in this case when she has completed her GAL services.
Where, as here, a statute provides for fees, we review the trial court’s award under the deferential abuse of discretion standard. (Kasperbauer, supra, 171 Cal.App.4th at p. 234.) Under the governing principles of appellate review, we presume the probate court’s order is correct, and the appellant must affirmatively demonstrate error. (In re Marriage of Arceneaux (1990) 51 Cal.3d 1130, 1133; Guardianship of K.S. (2009) 177 Cal.App.4th 1525, 1530.)
Relying on Estate of Corotto (1954) 125 Cal.App.2d 314 (Corotto), Berwick argues the probate court’s fee order “inappropriate[ly]” invaded Sharon’s trust “at the expense of the beneficiaries.” Corotto held that the GAL fees for one beneficiary, a ward, could not be deducted from the trust as a whole. Concluding “the order allowing compensation to the [ward’s] guardian ad litem must be reversed,” Corotto explained that “[g]uardianship expenses and fees should only be paid out of the ward’s estate or out of funds due and payable directly to the ward. Other heirs and legatees cannot be called upon to pay guardian fees for services for the benefit of the ward.” (Id. at p. 325.) Casting his argument more generally, Berwick asserts that “Walsh’s work on behalf of Sal[vador] could not be of any benefit to [Berwick], Sharon or Sharon’s Conservatorship, Sharon’s Decedent’s Estate, or Sharon’s Trust.”
The fundamental flaw in Berwick’s position is that he does not address the rationale offered by John and Gilda to charge Walsh’s GAL fees to Sharon’s trust instead of Salvador’s. Specifically, they pointed out that “ut for Mr. Berwick’s ongoing refusal to consent to the appointment of John as Guardian Ad Litem for Salvador, Ms. Walsh would not have needed to be appointed.” Thus, Berwick’s intransigent opposition—as the appointed representative on his mother’s behalf—resulted in “essentially . . . twice the costs,” i.e., both Walsh’s fees and a duplicate attorney for John and Gilda to advocate for a GAL for their father, only “to end up with the same result Salvador was initially seeking,” namely, “a court order to allow his children to act on his behalf.”
Berwick makes no attempt to refute John and Gilda’s claim Berwick’s actions resulted in duplicate fees “in excess of the fees Ms. Walsh is presently seeking.” Nor does Berwick explain why he so steadfastly opposed John’s or Walsh’s appointment as Salvador’s GAL and yet then, also without explanation, reversed course suddenly to offer no opposition to John or Gilda’s subsequent appointment. Berwick’s briefing ignores John and Gilda’s arguments as recounted in the respondent’s brief to support the judgment.
Curiously, Berwick captions his appellate briefs as a direct adversarial action pitting him against Walsh and vice versa. But that is not how this case arose or played out below. Instead, in filing and pursuing the conservatorship and trust petitions, Berwick acted as the conservator for his mother’s person and estate and as the trustee for her trust. Corotto thus supports John and Gilda’s position, not Berwick’s, because Berwick—while a beneficiary of his mother’s estate and trust—acted on behalf of her estate and trust as a whole, not in part for his interest as one beneficiary among others. Consequently, the probate court reasonably could conclude that because Berwick’s actions drove up the costs of the proceedings through litigation tactics on his mother’s behalf, her estate as a whole should bear those costs, not Salvador’s. The court did not abuse its discretion in issuing a fee order effectively holding that Berwick could not use his duty to shield his mother’s estate and trust as a sword to impose unjustified expenses on his adversary.
It may be that if there are other beneficiaries of Sharon’s estate or trust besides Berwick, Berwick’s actions should be charged against his interest, not theirs, but we express no opinion on unripe or merely advisory issues. (Wells Fargo Bank v. Marshall (1993) 20 Cal.App.4th 447, 458-459 (Wells Fargo).) It is enough that, as between Sharon and Salvador, the court did not err in assigning Walsh’s GAL fees to the former, based on Berwick’s actions. We may not search the record to justify his initial GAL opposition or subsequent about-face, or to otherwise thwart the judgment on grounds Berwick does not assert. The standard of review is to the contrary, and we instead presume the judgment is correct.
Berwick’s reliance on California Rules of Court, rule 7.955, similarly has no merit. That rule lists nonexclusive factors for the trial court to consider in deciding reasonable attorney fees “to be paid for the benefit of a minor or a person with a disability” (Cal. Rules of Court, rule 7.955(a)(1)) “[i]n all cases under Code of Civil Procedure section 372 or Probate Code sections 3600-3601” (ibid.). Berwick does not suggest how this case arose under any of those provisions or that he preserved the argument below. He notes only the superior court’s local rule section 601.23 declaring a preference to appoint attorneys as GALs to reduce fees because, instead of GAL and attorney fees, the appointees can “act as their own counsel.” But Berwick does not challenge on appeal the amount or reasonableness of Walsh’s fees. Instead, as discussed, he challenges only the court’s authority and discretion to order Sharon’s trust to pay them.
In any event, Walsh’s verified petition and supplemental petition for court approval of her “attorney[] fees and reimbursement of costs,” together with the detailed billing statements and other exhibits she attached, addressed the pertinent factors in California Rules of Court, rule 7.955(b) to determine reasonable fees, thereby furnishing ample support for the court’s fee order. (See Cal. Rules of Court, rule 7.955(b)(2), (4), (6), (8), (12) [e.g., amount of fee in proportion to value of services, the results obtained, the length of the professional relationship, the time and labor required, etc.].)
[b]DISPOSITION
The probate court’s fee order is affirmed. Respondents are entitled to their costs on appeal. We express no opinion on whether respondents may seek on remittitur Walsh’s fees on appeal in a supplemental petition for fees. (Cf. Wells Fargo, supra, 20 Cal.App.4th at p. 515 [probate court may authorize payment from trust of beneficiary’s attorney fees on appeal].)
GOETHALS, J.
WE CONCUR:
ARONSON, ACTING P. J.
THOMPSON, J.
[1] For clarity and ease of reference, we will refer to Sharon Luke-Borja and Salvador Borja, Jr., and to Salvador’s children (John Borja and Gilda Fracchia), by their first names. We intend no disrespect by the informal designation. (In re Marriage of Olsen (1994) 24 Cal.App.4th 1702, 1704, fn. 1.)
[2] In its original order, the probate court mistakenly designated Walsh as Sharon’s GAL, rather than as Salvador’s, but within two weeks the court issued a nunc pro tunc correction. (See In re Marriage of Padgett (2009) 172 Cal.App.4th 830, 852 [nunc pro tunc order corrects the record to reflect what the trial court actually intended to do].) As Berwick concedes, Walsh “was never Sharon’s GAL.”
